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Wednesday, 31 March 2010

One of the things that this insomniac Cat does between 2:00 am and 6:00 am is plot out his next MBA class. Twenty years of teaching law students did little to prepare me for the challenge of translating IP into a framework that resonates with the totally different orientation of an MBA student. Facing a classroom filled largely with upwardly mobile high tech and start-up types, the most challenging part of IP is how to present trade marks in an meaningful way to MBA students, and that means dealing with the issue of branding. It's that time of the course to address this issue, so here we go ....

The challenge in addressing trade marks and branding is threefold. First, the trade mark paradigm is so very different than it is for patents and copyright. Second, the notion of "brands' can be, how should we say it, fuzzy at best. Third, it is unlikely that the branding function is handled in a centralized manner within the company. Let's look briefly at each of these elements.

I. As for the difference in the nature of the trade mark paradigm, if you don't believe me, try tocharacterize each of the principal basic IP rights. For patents, copyright, and even for trade secrets (if you want to venture further out), the following three-part framework will do just nicely, (i) the creator of the right; (ii) the entity commercializing the right; and (iii) and the public interest. Just about the time that students have figured out this paradigm (or any other comparable paradigm that you might propose for patents, copyright and trade secrets), you then have to disclose the dirty little secret, namely, it does not work for trade marks.

Challenge number one, therefore, is to come up with a working paradigm for trade marks.

II. Second, what do mean by "branding"? I like to bring the following definitions for consideration:

(i) "Information about a particular product or service, the core trademark behind the brand, other trademark supporting the brand, any family of marks, domain names, sub-brands, product packaging, the manufacturer and the trade name, advertising of the product, distribution of the product, celebrity endorsements and even shelf displays ... Essentially, the brand comprises all publicly available knowledge with a particular product, service or company. The trademark is just the legally protectable portion" (Freno, "Trademark Valuation: Preserving Brand Equity", The Trademark Reporter, vol. 97, no. 5, 2007).

(ii) "The interest in the economic value of brands as corporate assets that create wealth for the stakeholders in a corporation. Brand equity embraces brand-name awareness, brand loyalty, perceived brand equity and positive subjective associations. This leads to the proposition that brands are a form of intangible property which may be protected by the trade mark, copyright and patent laws, and by common law principles of passing off" (Belson, "Brand Protection in the Age of the Internet" [1999] European Intellectual Property Review 481).

Observing that a brand "comprises all publicly available knowledge associated with a particular product, service or company", or that brand equity is "the economic value of brands as corporate assets that create wealth for the stakeholders in a corporation", is illuminating, but the scope of each of these descriptions is extremely broad. From the point of view of useful information, the question arises: What one is meant to make of these characterizations? There is no ready answer, either singularly or in the aggregate, to the question.

How to keep this uncertainty within meaningful bounds for the students is challenge number two.

III. Third is the question: Who within the organization is charged with dealing with the issue of brands and brand equity? The potential disconnect between trade marks and branding was brought home me last summer before an audience in Mumbai. The topic there was "trade mark valuation", and in the back-and-forth with a member of the trade mark department of a world leader in the entertainment industry, I asked the question: "At what point are you called in to take part in the process." Her answer was straight to the point--"Never. Issues of branding and valuation are for another department." End of discussion.

So who takes care of branding? Presumably, for companies, such as those in the luxury goods business, where branding is their raison d'etre, such the organizational chart will attempt to provide an answer. There are other companies that have sought to place branding somewhere within the organizational chart, if not quite front-and-centre as in the luxury goods business. But for many companies, my sense is that the issue is scattered and diffuse within the organization. In such a case, while one can inculcate a sharpened awareness within students about branding, how it will play out will differ radically between companies.

Challenge number three, therefore, is to bridge between the need to translate the broadly-cast definition of brands into terms that are at once general for all the understand, on the one hand, with providing sufficient nuanced meaning to enable students to adapt these concepts to the needs of their particular circumstances.

It's 6:00 am and the alarm clock has gone off. The time for rumination is over. Now I need how to figure out how to face those students later in the day.

2 comments:

jack mcvooty
said...

Describing how branding is viewed within a company by IP attorneys (a melange of protectable and non protectable elements), marketers (selling power; customer loyalty; price premium) and finance departments (monetized asset; source of long term growth), I find useful when explaining branding.

Thanks for your observations. I agree that you have identified three principal vantages of branding. The problem, from my experience, is that within a company: (i) there may well not be an in-house IP/trademark person; (ii) the marketers may be scattered throughout a number of functions; and (iii) brand valuation is often an out-sourced task carried out by independent consultants or accountants. As a result, it can be and often is difficult to get one's arms around branding within the company setting.

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